On 24 February 2025, HMRC advised the value of the The Advisory Electricity Rate and The Advisory Fuel Rates that apply from 01 March 2025.
Both are payable to either reimburse employees for business travel in a company car or to calculate the amount an employee should repay where are required to repay the cost of fuel used for private travel (in a company car).
Whilst these rates are effective 01 March 2025, employers can use the previous rates for up to one month, therefore, they must be in place by 01 April 2025.
Note these rates are advisory which means employers can pay at a higher rate if they can justify the costs per mile are higher. If they cannot, the excess is profit and subject to tax and Class 1 NICs.
The Advisory Electricity Rate (AER)
The rate from 01 March 2025 is shown below compared to the rate applying from 01 December 2024 showing no change to the 7p per mile:
|
Advisory Electricity Rate
|
Date
|
Rate
|
|
Fully electric company cars
|
From 01/12/24
|
7p
|
|
From 01/03/25
|
7p
|
This rate is reviewed every three months.
The Advisory Fuel Rates (AFRs)
The rates from 01 March 2025 are show below compared to the rates applying from 01 December 2024, with changes highlighted by *:
|
Fuel
|
Date
|
Engine Size
|
|
1400cc or less
|
1401 to 2000cc
|
Over 2000cc
|
|
Petrol / petrol-hybrid
|
From 01/12/24
|
12p
|
14p
|
23p
|
|
From 01/03/25
|
12p
|
15p *
|
23p
|
|
LPG
|
From 01/12/24
|
11p
|
13p
|
21p
|
|
From 01/03/25
|
11p
|
13p
|
21p
|
|
|
Date
|
Engine Size
|
|
1600cc or less
|
1601 to 2000cc
|
Over 2000cc
|
|
Diesel
|
From 01/12/24
|
11p
|
13p
|
17p
|
|
From 01/03/25
|
12p *
|
13p
|
17p
|
These rates are also reviewed every three months.
